Citi Private Bank (part of Citigroup) and Knight Frank have published their 2007 Annual Wealth Report on where the wealthy are likely to buy first or second homes (download the pdf report here). The research was done in January and February and the sample was chiefly UK residents. The reportâ€™s second component is the Prime International Residential Index, comprising a basket of properties located in more than 70 prime market locations worldwide and valued over time to provide an accurate guide to average prices and price movements.

Maybe not surprisingly, the report reflects confidence that the worldâ€™s high net worth individuals (HNWIs) are going to continue to prosper as a class and that theyâ€™ll be at the cutting edge in patterns of real estate investment, market leaders as well as fashion leaders.

After a fortnight of tumult for Spanish Property Developers, commentators are taking stock of the situation.

Last week news headlines were taken by the plummeting stock price of the Valencian property developer Astroc Mediterraneo, which fell 65% and reflected a now sensible price earnings ratio of approximately 19. Astroc’s recent fall is really the second part of a downturn that began with a worldwide plunge in share prices in late February when Astroc stood at approximately 70 euros a share. The price dropped to 45 euros in a single day and then stablilised until mid April when it began to fall once more.

According to Nomura, shares in Spain’s 10 top property developers have lost about 7bn euros in the second half of April. The scale of losses has prompted business and government figures to issue statements designed to reassure the markets. Such a loss naturally raises questions about the causes of the decline and how long the setback to shareholders and holiday home owners is likely to last. Property investors will want to know if the downturn is a harbinger of problems spreading to other parts of Europe or the world.

Although China’s economic and social conditions have changed dramatically with its emergence as an economic force, its private property rights have remained untouched and so far looked out of context. But on Sunday, as its top legislators urged the passage of a new law to protect private property, the pieces of economic, social and private property rights now appear to be falling into place.

China, a dominating communist force of the 20th century, has altered its contours significantly and is poised for another swing. The new bill, which is likely to be cleared by the parliament next week states that “the property of the state, the collective, the individual and other obliges is protected by law, and no units or individuals may infringe upon it“. This will help protection of private assets and stop any illegal expropriation. Although it will not solve all the issues pertaining to the property rights in China, it would provide a good balance between private investment and state control.

As the amount of private investment in China’s economy substantially increases, it is very important for investors and individuals to protect their property rights. The 40 page bill states that “the lawful property of individual persons shall be protected by law“, which would provide a boost of confidence to investors in private property.

Other major beneficiaries will be farmers who would get protection against illegal land seizures. This could bring to rest the farmers’ movement initiated by farmers to protect their farmland against illegal land seizures and transfers to commercial developers, often without adequate compensation.

It took much longer than anticipated for the legislators to bring about the much-desired change in the property rights law in China; it is a leap towards democratisation of China. However, critics still believe that the bill has a tone that recognises the state owned sector as the most dominating and leading force.

Whatever it is, we would say a great move for another revolution. As you can see in the tabs on the top, we now have a new forum where we would be glad to hear your thoughts. It’s very easy to join, try it out.

I came across an interesting article on CNN Money titled “The ‘YouTubing’ of real estate”. It talks about a new trend in the US by home sellers who now incorporate professionally produced ‘news style’ video streams on their websites to promote their property.

According to Charlie Young, the vice president for marketing at Coldwell Banker, “we were telling all our brokers about the need to put more [still] photos on their Web sites. Today, if your site doesn’t offer virtual tours, mapping technology, neighborhood guides and a video library of buying and selling tips, it’s nowhere.”

This trend can be connected to the YouTube phenomenon in the States, where virtually everybody makes and posts their own videos online. The website on focus was the Peninsula on Indian River Bay development in Delaware which is hosted by a male and female “news presenter” cost the project’s developer about $50,000. In my opinion the cost is a no brainer for property developers but should be dramatically scaled down for individuals selling their homes. Maybe its an opening for small time film makers to team up with estate agents….hmm

CapitaLand, Southeast Asia’s biggest developer, said on Feb 14 it plans to double its real estate investment trust (REIT) portfolio to 10 by 2010, as it looks for new opportunities in China, India and Malaysia.

The group, which reported a record profit for last year, owns five REITS, including retail-based CapitaMall Trust and office-based CapitaCommercial Trust, with exposure to countries such as Singapore, China and Malaysia.

Poland has jumped to the top of the European house price growth league table after property values there soared 33% last year, according to a study published yesterday. Locals and foreign investors who were smart enough to buy property in Krakow, Poland’s ancient royal capital, are toasting a 58% rise. That makes the medieval city Europe’s top-performing location.

The Royal Institution of Chartered Surveyors looked at the rates of house price growth in 26 European countries, and named other star performers as Denmark, Bulgaria and Estonia. Most countries saw solid house price inflation in 2006, with European markets failing to follow the lead from across the Atlantic, where the US property market ground to a halt.

Morgan Stanley has agreed a $6.6 billion (£3.34 billion) deal to buy a string of luxury hotels and holiday resorts, in a move that will give it control of one of America’s most famous golf courses.
The Wall Street bank’s real estate division has secured a deal to buy eight high-end resorts from CNL Hotels & Resorts, which operates 59 luxury hotels and resorts across the United States.

Among the hotels included in the deal is the Doral Golf Resort & Spa in Miami, which has played host to PGA Tour tournaments for more than 40 years. The Doral operates five championship golf courses, including The Great White Course. Playing a round of 18 holes on the course, designed by Greg Norman, the former world No 1 and twice winner of the Open Championship, costs up to $250.

As part of the deal, the two parties have agreed that CNL will sell 51 of its hotels to Ashford Hospitality Trust, a US investment trust, in a $2.4 billion deal. Morgan Stanley will take control of CNL and its remaining eight high-end properties, which include three properties trading under Hilton’s Waldorf- Astoria brand.

The portfolio of properties being bought by Morgan Stanley Real Estate also includes a Ritz-Carlton- branded property, two JW Marriott properties, The Doral and The Claremont, a resort in California. The properties will give Morgan Stanley a presence in four of America’s key destination regions: Florida, California, Arizona and Hawaii.

Morgan Stanley Real Estate was founded in 1969 as a mortgage brokerage business. It has widened to encompass banking, lending and investment. The group led the consortium that in 2004 bought Canary Wharf in London.

The CNL purchase comes as the group finalises a deal to dispose of 32 of its properties to Whitehall, an affiliate. Morgan Stanley’s deal with CNL includes the assumption of the company’s outstanding debt.

CNL Hotels & Resorts was created in 1996 to lead investment in the hospitality sector on behalf of CNL Financial Group, its parent group. The company, now a real estate investment trust, went on to become a developer and buyer of hotel and resort businesses.

CNL Financial Group was founded in 1973 with a $5,000 loan and has grown to be one of the largest privately owned property and financial groups in the United States, with $19 billion of assets.

The international commercial property market attracted record levels of investment last year, with $US643 billion ($814 billion) in stock changing hands – a jump of 33 per cent on the previous year.

In spite of widespread predictions that the global boom is unsustainable, institutions and private investors have continued to pour money into shopping centres, offices and industrial parks.

Europe and Asia saw strong growth last year, with volumes up 50 per cent and 48 per cent respectively, according to a survey by real estate consultants Cushman & Wakefield.

The trend comes amid a surge in both property prices and deal volumes that can be traced back to the stock market collapse of six years ago.

In the wake of the falls in equity prices, many pension funds and other investors earmarked more cash for alternative asset classes, including property as well as commodities, private equity and infrastructure.

As prices were forced upwards, pushing up total returns, ever more buyers have entered the market.

Many observers talk about a “grass is greener” syndrome where Asians, Americans and Europeans place money abroad in the hope of better returns.

This cross-border investment represents 29 per cent of the total investment market, up from 25 per cent in 2005, according to Cushman & Wakefield. This trend is strongest in Europe, where more than half of deals are by buyers from other countries.

David Hutchings, European head of research for the company, said the flow of new money was still “escalating”, as investors were drawn by the sector’s recent strong returns.

“Despite most markets entering a period of potentially slower economic growth, indicators point to continuing high investment volumes through this year,” he predicted.

Yields – or “cap rates” in the US – that show the proportion of annual rent against the cost of a building, have fallen to new lows. Some office blocks in the world’s most glamorous cities are selling at yields of less than 4.5 per cent – often below the cost of borrowing.

Property in France, the United States and Italy is topping the shopping lists of City bankers this bonus season, with many putting down large deposits to reserve their second homes without even bothering to view the house.

About 51% of the City’s bonus-earning workforce plan to buy property abroad in 2007, a poll by Populus for the property agency Pure International has found. Favouring established destinations, 28% of respondents put France top of their list, 23% chose the United States, 21% went for Italy – including Tuscany, above – 19% preferred Spain and 18% opted for Switzerland. The respondents, with an average salary of £331,000, are set to draw average bonuses of £294,000.

Sean Collins, of Pure, said: “We have sold out a development of 77 units in Switzerland with an average price of £750,000. Many of the buyers were City based and … reserved speculatively without even visiting.”